“The one thing I learned coming from law enforcement, and then working for Coldwell Banker Residential for two years, is that I would not describe myself as a sales person,” Waters said. “Real estate is a very difficult business. I much prefer and enjoy my investigative background. My law enforcement background and my real estate brokerage knowledge were the perfect match for working as an investigator for the Colorado Division of Real Estate.”

Starting on Friday, 39-year-old Waters will take charge as the new director of the division, which is responsible for enforcing regulations pertaining to real estate brokers, appraisers, mortgage brokers and others.

She replaces Erin Toll, who left the office in June, after three months of controversy that included a much-publicized whistle-blowing charge against her former boss, Barbara J. Kelley. Kelley, Executive Director of the Colorado Department of Regulatory Agencies, tapped Waters this week as Toll’s replacement.

“I think I am going to be much more moderate than the previous administration,” Waters said in a phone interview late Thursday afternoon. “I think a lot of issues can be resolved through more education, training and sometimes probation.”

She also said that she wants to be more “forward-looking,” when it comes to weeding out the bad apples in the business.

Bad actors need to be stopped in tracks

“I think there is a lot of innovation in the industry, if you have somebody who is inclined to proceed,” with fraud or deceptive practices, she said. “One of my goals is to open up the lines of communications with industry officials, so we can head off that type of behavior in the early stages. We are going to be less reactive and more proactive than we have been in the past.”

One of her goals is to investigate ongoing schemes that are occurring “in 2010, which is different than investigating things that occurred in 2005. The division has some very valuable historical knowledge. But we are now going to focus more on the present than the past. It will be a very difficult transition, but with more open communications with the industry, it will help us a lot.”

Toll, for her part, said many of Waters’ plans sound like a page out of her playbook, although she admitted, “I was never moderate – I was always very aggressive.”

Toll praises Waters

Toll said Waters is extremely qualified for the position.

“I wish her the best,” said Toll, an attorney by trainings, who is now a broker with Perry & Co. “I didn’t hire her, but I promoted her three times. She knows the law really well, coming from a law enforcement background. She was very good at what she did.”

Waters already has been very visible in real estate circles. She just spoke to the Colorado Mortgage Lenders Association and next week is addressing the Colorado Realtors Association.

One area she is bracing for is an increase in complaints against appraisers, because of changes mandated by the Dodd-Frank financial reform legislation and new truth-in-lending requirements.

Appraiser complaints expected to rise

For example, loan originators are now considered “settlement service providers,” and if they see problems with appraisals – such as data not being properly collected or analyzed – they are required to file a complaint with the division’s real estate appraisal board. That is also true about real estate brokers and title companies that see problems with appraisals, she said

“I think we are going to see an increase in complaints against appraisers,” she said. Indeed, her stuff currently is authorized at slightly more than 50 full-time employees, but she said it is possible they will need more investigators to deal with the expected increase in appraisal complaints.

She also said it is possible her office could become involved in the recent flap regarding big banks such as Bank of America using “robo-signing” of documents, instead of reviewing them, which led to Bank of America temporarily halting foreclosures. Other lenders also are taking similar steps.

“It would depends if it gets down the level of the licensees that we regulate,” Waters said. “If some of the problems involved mortgage loan originators that were involved with applications that did not accurately reflect loans being made  in line with borrower’s assets and earnings, it is possible we could get involved.”

Waters is a Colorado native who graduated from the University of Colorado at Boulder with a degree in sociology, with a focus on criminal justice.

Investigated wide-range of crimes

She served on the Lafayette police department for eight years, first as a patrol officer and then a detective.

The range of crimes she investigated included home invasions, burglaries, child abuse, adult sexual abuse, attempted murder “and one homicide toward the end of my career. I was not the lead detective on that case, but I did a lot with search warrants to gather evidence. I did a lot of writing of search warrants.”

When not at work, she tries to spend as much time with her two boys, who are 6 and 8 years old.

She still lives in the Boulder area, and commutes downtown Denver with her husband, a para-legal.

“It helps with our commute, because we can use the HOV lane,” she noted.

Skiing not her thing

One thing that does surprise people is that despite being a Colorado native, she doesn’t ski.

“I am always embarrassed to tell people that I have never skied,” Waters said. “Slapping two pieces of wood on my feet and sliding down the side of a mountain, for me, does is not a good idea. For me, I know it would be a recipe for disaster.”

But she hopes that she can help homeowners avoid potential disaster by following the fall-line of legislation and preemptive strikes against those planning schemes to commit fraud.

“I think it is going to be exciting.”

Contact John Rebchook at JRCHOOK@gmail.com.

Related Posts:

• Waters named director of Real Estate Division
• Rosemary Marshall named to mortgage board
• Erin Toll successor to make about $80,000-$120,000
• Erin Toll Resigns
• Fines soar under Toll

Barbara Kelley, the Executive Director of the Department of Regulatory Agencies  appointed Waters, who had been the interim director of the real estate division in the wake of Erin Toll being placed on leave last March by Kelley. Toll reached a settlement with the state in June and launched a new career as a broker with Perry & Co. Waters is a 5 1/2-year veteran of the Division of Real Estate.

“Clear vision”

“Ms. Waters has been impressive in her ability to communicate well with all sectors of the real estate industry, and is a regulator who takes consumer protection very seriously” said Kelley, in a statement. “Marcia has a clear vision of what she wants to accomplish as Division Director, is passionate about consumer protection, and understands the dynamic nature of real estate in Colorado.”

Waters is respected by DRE staff, members of the real estate board and commissions, legislators, and real estate industry professionals, she added. Before joining the  Division of Real Estate,Waters was a licensed real estate broker, and has experience in law enforcement, rising to the rank of detective.

Expect Waters to be stern, but fair

“I am confident that Marcia Waters will be an excellent leader as the Real Estate Division Director,” said Kelley. “She will continue to be open and approachable to the industry, and will maintain her role as a stern and fair protector of the public’s interest.”

Independent real estate broker Gary Bauer said most observers he spoke with believed that Waters would get the job.

“It was expected,” Bauer said. He said he thinks Waters will do a good job.

“Everyone I speak to who knows her says she is an effective administrator, is very fair, and will continue to conduct investigations, but in a different manner than her predecessor,” Bauer said. “She will take the division to the next level, in her own way.”

Toll was placed on leave by Kelley after Toll said that state Sen. Ted Harvey was being investigated because the mortgage company where he worked was allegedly misrepresenting ads with fliers that looked like official, government documents. DORA later said Harvey was not under investigation. Toll filed a grievance against Kelley, her boss at the time. As part of the settlement between DORA and Toll, both sides agreed to “refrain from making any disparaging, negative or uncomplimentary statement, whether public or private,” against each other.

Contact John Rebchook at JRCHOOK@gmail.com

Related Posts:

• Waters: Real estate’s new “top cop”
• Rosemary Marshall named to mortgage board
• Erin Toll successor to make about $80,000-$120,000
• Erin Toll Resigns
• Fines soar under Toll

Ritter, however, did not announce that he had named Marshall and four others to the board until Thursday. The law creating the board, House Bill 10-1141, was signed by Ritter on May 26. HB 10-1141 also changes the Division of Real Estate from what is known as a Type 1 transfer – a largely autonomous division – to a Type 2 transfer, which falls more under the umbrella of the Department of Regulatory Agencies.

The successor to Erin Toll, the former director of the Division of Real Estate, will have less power to wield than she did. Toll left after being placed on a paid leave of absence following a run-in with a mortgage broker, Sen. Ted Harvey, R-Highlands Ranch. Toll, now a Realtor with Perry & Co., dropped a whistle-blower complaint against DORA when she accepted a buy-out offer. The word on the street is that Toll’s replacement will be named in late September of in October.

Marshall’s didn’t want Toll’s job

“I did not put my hat in the ring for that job,” said Marshall. “That job is going to be more of an administrator’s job going forward, than actually being a director. But I actually did request and apply to serve on the board. The governor’s office called me on Wednesday to let me know I had been named on the board.” (For more on this subject please visit Erin Toll’s succesor to be paid $80,000 to $120,000.)

Marshall, who was initially elected as a state representative in 2000 and served four terms, around 2006 focused on enacting laws combating fraud and deceptive mortgage practices. In 2007, she sponsored what at the time was heralded as one of the most comprehensive packages of mortgage fraud legislation in the country. She received awards from Colorado Bankers Association and the Colorado Association of Mortgage Lenders.

Consumer advocate

“I think it is really important to have a consumer-advocate on this board who understands the law, which I do, since I initially was a sponsor of it and helped get it passed,” Marshall said. “I don’t think mortgage fraud is as much of an issue as it was back in 2007. Still, it is very important to ensure that the consumers and the public know if they have complaints about mortgage fraud that it will be investigated. And it is important to have people on the board who are very knowledgeable about the law, which I am.”

Marshall’s term, as well as Billy “Bart” Glenn Bartholomew’s of Arvada, will expire on Aug. 10, 2014. Julie I. Piepho, an executive vice president of Cornerstone Mortgage in Fort Collins; Cheryl L. Dingwell-Keckritz, of Clarion Mortgage Capital of Colorado Springs; and Leslie J. Mitchell of Denver, all were appointed to terms that expire on Aug. 10, 2012. Mitchell formerly was the president of 1st Bank of Cherry Creek. She retired earlier this year.

Under the law, three of the appointees must be licensed mortgage originators, while two need to be members of the public not engaged in mortgage origination or mortgage lending.

“Final and ultimate authority”

The board is the “final and ultimate authority for rule-making, enforcement and for the administration,” of the program. The board, however, may delegate in writing any of its duties to the director of the Division of Real Estate.

The board may deny an application for a mortgage broker, refuse to renew, suspend or revoke the license, enter cease and desist orders and impose fines if mortgage companies violated provisions that include: acting without proper registration; failing it maintain possession of document’s as prescribed by the board; employs or acts through unlicensed mortgage loan originators; or if the mortgage company engages in non-compliant, false or deceptive advertisements Toll had launched an investigation of Sen. Harvey’s firm for alleged deceptive advertising.

The board may fine mortgage companies who violate the standards of conduct under the law. Fines may not exceed $1,000 per violation in the first administrative proceeding and cannot be less than $1,000 or more than $2,000 per violation, in subsequent administrative proceedings.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

Related Posts:

• Waters: Real estate’s new “top cop”
• Waters named director of Real Estate Division
• Erin Toll successor to make about $80,000-$120,000
• Erin Toll Resigns
• Fines soar under Toll

The state today posted a job description to fill Erin Toll's former job as the director of the Division of Real Estate.

Vote at the bottom of this blog on whether you think the next real estate division director will be as high-profile as Erin Toll. Also, information on how to apply for the job is at the end of the blog.

The person hired to replace Erin Toll as the director of the Colorado Division of Real Estate can expect to make about $80,000 to just under $121,000 annually, according to the job posting for the position released today.

Applicants have until 5 p.m. on July 12 to submit an application for the job, which has a salary of $6,662 to $10,067 a month, which equates to an annual salary of $79,944 to $120,804. Toll, who had been placed on a paid leave of absence following a highly publicized confrontation with a mortgage broker, State Sen. Ted Harvey, (R-Highlands Ranch), recently received about a $55,000 settlement agreement with the Department of Regulatory Agencies, which oversees the real estate division. Toll, now a real estate broker with Perry & Co., was paid slightly less than $115,000 in her position.

Observers said they expect a large number of people will compete for the job, especially considering the softness in the real estate industry. Several people think the Department of Regulatory Agencies, or DORA, will want someone less high-profile than Toll, who perhaps received more press on a fairly regular basis than any other department head of a state agency. After being placed on paid leave last spring, a great deal of criticism and anger against her surfaced from some people in the real estate industry, although others also lavished praise on her for aggressively going after the “bad actors” in the industry.

Director job carries a lot of responsibilities

The job requires overseeing the day- to-day operation of about 49 employees. The division , regulates real estate licensees, mortgage brokers, real estate appraisers, subdivision developers and conservation easements.

The director “analyzes, interprets and renders decisions on complex issues,” according to the job description. “One of the critical responsibilities,” of the director is to determine the extent to address regulatory or administrative issues and work closely with the of Real Estate Commission, the Board of Mortgage Loan Originators, the Board of Real Estate Appraisers, and the Conservation Easement Oversight Commission, according to a description of the duties. The director also needs to advise the executive director of DORA; testify and advise legislators when requested; represent the division publicly; and serve as the media contact.

The requirements include a college degree in business administration, pubic administration or a closely released field, as well as six years of experience as a senior or high-level management position in a regulated industry. A law degree is preferred.

Ideal candidate knows real estate

Observers said that the ideal candidate also should be well- versed in a wide variety of real estate practices.

“I think my ideal profile of a person for the job would be somebody who has a fundamental knowledge of all the parts of the real estate industry it oversees,” said Mike Rosser, a long-time mortgage official and consultant. He said the person will need to understand federal laws pertaining to real state and lending, as well as state statute.

Asked if he thought the state would want someone as high-profile as Erin Toll, he said he would assume that they want someone who runs the operation effectively and fairly, while being “transparent” to the public.

“I think I would characterize that question a little differently,”Rosser said. “I think there is a distinction there between courting the public light or getting the spotlight on you, but still getting your message out to the public.”

Marshall qualified, not interested

Former State Rep. Rosemary Marshall, who had received an award from Colorado Bankers Association for sponsoring consumer protection issues, which resulted in the passage of new laws regarding penalties for Identity Theft and Predatory Lending, read the qualifications online for the job after being contacted by InsideRealEstateNews.

“Clearly, with all my state government and management and state organizational work, I am really familiar with that industry,” Marshall said. “After reading through it, I would say there is not any part of it that I’ve missed. When I was in public office, I got along real well with consumes and people in the real estate and financial industries. But while you never say never, it is not on my radar.. .I have not been approached about the position and no one is inviting me to apply. So I would have to say at this time, I have no interest in that job.”

However, she thinks there will be a large number of people applying for the job, both from within the division and outside.

She agreed with Rosser than the ideal candidate would be very knowledgeable about every aspect of the real estate industry. And she said the person needs to be “political savvy” and be able work well with state legislator.

“I do think it is gong to be a very different environment,” for Toll’s successor, Marshall said. “The division is still committed to consumer protection and protecting people from unscrupulous people in the industry, and still will have to make sure people in the industry follow all of the laws regarding licensing. But I think the person who does this next, is going to be under a different kind of scrutiny.”

Although Marshall is not interested in the division director, she would like to serve on the new board that will oversee mortgage brokers for the first time. She said she hopes to be appointed to the board by Gov. Bill Ritter.

Williams says Ritter’s administration plays politics

Kathi Williams, who last year resigned as the head of the Colorado Division, said she thinks the Gov. Bill Ritter administration wants someone more low-key than Toll as the next director of the real estate division.

“My experience with this administration, is they want somebody who is going to follow orders,” said Williams, a Republican legislator in Adams County from 1984 to 1990. “I don’t know what Erin Toll did or did not do a far as Ted Harvey, and there was some criticism for how aggressive she was, but I would really have thought that the (Ritter) administration would really have come down on her side. I do not think they want people like Erin Toll. They pretty much want people who fly under the radar. I know in my position, you would have thought that (the Ritter administration) would have been very grateful for all the federal dollars we brought in for affordable housing and launching the Colorado Foreclosure Hotline. Even though we did things that made the administration look good and reflected well on them, we not get anything from them but being castigated. I don’t know how much of that Sen. Harvey issue was a driving force, but I know every time my name appeared in the press, I would be criticized by my boss. But since I was making them look good, you would have thought they would have been happy as a clam. They wanted to fire me, but they couldn’t, so they just made my life miserable.”

Although she was a Republican under a Democratic governor, she said that shouldn’t have been an issue. Evan Dryer, spokesman for Ritter’s office, did not immediately respond for a comment. “I dropped all of my Republican politics when I became the housing director and focused on affordable housing issues,” Williams said. “And even when I was a legislator, thought I was very bi-partisan.”

While Rosser and Marshall thought the salary range for the next director was very attractive, Williams said she was making about $125,000 when she left her position as the head of the housing division. “I think what they might have going for them in finding a very qualified person, is that the current state of the real estate industry,” Williams said. She said people who might not have considered the job at the proffered salary during the go-go days of real estate, might find the salary very enticing today.

Below is information regarding applying  for the job as executive director of the Colorado Division of Real Estate.

To access the application on line,  go to this link.

Submit all application materials to:

Department of Regulatory Agencies

Human Resources

1560 Broadway, Suite 1550

Denver, CO 80202

If you have any questions or need additional information, contact Carol Stahlberg at 303-894-2360.

NOTE:  Faxed or e-mailed applications are not accepted.

To contact John Rebchook go to JRCHOOK@gmail.com or 303-945-6865.

Related Posts:

• Waters: Real estate’s new “top cop”
• Waters named director of Real Estate Division
• Rosemary Marshall named to mortgage board
• Erin Toll Resigns
• Fines soar under Toll

Erin Toll Glover is receiving $55,000 from the state in a settlement.

Take a Toll poll at the bottom of this article

The state is paying almost $74,000 to settle the Erin Toll case, InsideRealEstateNews.com has learned.

The cost includes more than $55,000 to Toll and $18,400 to a private attorney that represented the state.

Toll, the former director of the Colorado Division of Real Estate, resigned on May 31 and started working as a real estate agent with Perry & Co. on Monday. She had filed a whistle-blower complaint against her boss, Barbara Kelley, head of the Department of Regulatory Agencies, or DORA, but all of those actions are dismissed as part of the settlement. Also, Toll has agreed not to sue or take any other legal actions against state agencies as part of the settlement.

The state has agreed to pay Toll $55,053.93, according to documents obtained through a Colorado Open Records Act request by InsideRealEstateNews.com.

Toll is receiving $37,895 from the Office of Risk Management and another $10,000 from the Risk Management Fund, for a total of $47,895. Those payments are “not designated as wages, salary or back pay,” according to the settlement agreement. “The payments are made in compromise of Ms. Toll’s claim. The payment of $10,000 and $37,895 will be provided to the Law Firm of Frank & Finger for delivery to Ms. Toll.” The agreement also says each side shall bear their own costs for legal fees.  Neither Toll nor state officials could immediately be reached to discuss the details of the settlement.

In addition, Toll is receiving $7,158.93 from DORA, which “includes full payment of all accrued annual leave…as of the date of Ms. Toll’s resignation,” according to the settlement. All of the money is to be paid to Toll within 30 days of her resignation.

No name-calling allowed

The state “does not admit to any impropriety, wrongdoing or liability of any kind whatsoever, but is entering into this Release and Settlement Agreement in compromise of dispute claims for compensatory damage and injunctive relief,” according to the documents. In addition, both the state, Toll and her attorney, have agreed to “refrain from making any disparaging, negative or uncomplimentary statement, whether public or private,” against each other.

Separately, the state has been billed a total of $18,405.92 from the private law firm of Wells, Anderson & Race, LLC. When added to the $55,053.93 to be paid to Toll, the total cost is $73,459.85. Attorney Cathy Greer of Wells, Anderson & Race rm represented the state, after Bill Finger, Toll’s attorney, argued in court documents that the Colorado Attorney General’s office could not represent DORA, as it previously had represented Toll in numerous cases, posing a conflict of interest. The attorney general’s office said it did not have any legal obligation to recuse itself, but did so to avoid any appearance of a conflict of interest.

The state retained Greer at a pre-negotiated price of $200 per hour.

Greer’s law firm billed the state $2,750.20 for April, and that was paid on May 20. At $200 per hour, that equates to 13.75 hours. It also billed the state $15,655.72 for May, which equates to 78.3 hours at $200 per hour. Combined, that comes to 92 hours. The state just received the May bill and has not yet paid it. The state declined to provide InsideRealEstateNews.com with “memos, research and recommendations,” it requested, saying those are “privileged.”

Toll’s lawyer Finger declined to discuss the law firm’s billings or compensation, but only had praise for Greer.

“Cathy is a good lawyer,” Finger said. “Cathy, in all my dealing with her over the years, has always been very professional. Cathy and I have a good working relationship. I respect Cathy wholeheartedly.”

Private attorney’s cost appropriate, reasonable

Greer’s compensation seems reasonable, said Howard B. Gelt, a lawyer with Polsinelli Shughart P.C., who was not involved in the case.

“Based on what you told me, I actually think it is pretty cheap,” said Gelt, a long-time real estate and business attorney. “Quite frankly, $200 bucks per hour is quite reasonable for a somewhat complicated mess like this one. And 92 hours over 45 days for a fairly intensive case certainly seems reasonable.”

Also, the attorney general made the right decision in removing itself from the case, he said.

“When you get into a situation like this, the first thing you have to do is to tell each party you can’t represent either of them,” Gelt said. “When you have a conflict, or an appearance of a conflict, it makes no difference whether it involves private companies and individuals, or the public sector. In both cases, you have to find separate counsel.”

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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• Erin Toll trades jabs with DORA boss
• Erin Toll faces "hostile environment"
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Erin Toll Glover has resigned as the director of the Division of Real Estate and will sell homes for Perry & Co.

Take the Toll Polls at the bottom of the story

Erin Toll has resigned as the director of the director of the Colorado Division of Real Estate.

Toll, who has been embroiled in a controversy for the past three months, officially resigned on Monday, announcing that she will become a real estate agent with Perry & Co. In other words, instead of enforcing rules against real estate brokers, she will now become one.   Toll, a lawyer, already has passed the real estate exam.

“My primary focus for more than a decade of public service has been as a consumer advocate,” Toll wrote in her letter of resignation. “Given the controversy that has distracted the division from its mission for the last several months, I believe that the best interest of the consumers and citizens of the State of Colorado is served by this action.”

Controversy dogged Toll

The controversy began following a confrontation with Sen. Ted Harvey, R-Highlands Ranch, on March 2 at a state committee meeting. The day after, Toll “officially” launched an investigation of Harvey, a mortgage banker, and his company, American Home Funding, although there is some dispute when the investigation over alleged deceptive advertising began. In any case, soon after, Toll’s boss, Barbara Kelley, the executive director of the Colorado Department of Regulatory Agencies, put Toll on paid leave without explanation. But before that, DORA announced there never was an investigation of Harvey. In addition to real estate brokers and mortgage brokers, the division oversees appraisers and conservation easements.

Toll, Kelley in opposite corners

Kelley also placed a gag order on Toll, which prevented her from giving her side. Toll responded with whistle-blower suits against Kelley and DORA, and other legal actions. Kelley has also declined to comment publicly. But in a legal document obtained by InsideRealEstateNews, Kelley wrote that the basis for Toll investigating Harvey was “determined to be factually inaccurate; demonstrated poor professional judgment; and was a release of information (true or false) that possibly violated the Department’s Media Policy.” Kelley said that Harvey has “not been and is not now the subject of any investigation,” by the real estate division. Kelley went on to write that Toll showed a “conflict of interest” regarding Harvey, “as well as creating the risk for damaged credibility of the Division of Real Estate” and DORA. Toll, in a legal fight, unsuccessfully tried to get her job back with all her prior responsibilities. Toll was paid just under $115,000 a year as director.

But a joint press release from Toll and Kelley released in conjunction with Toll’s resignation,  “had this to say: “Ms. Kelley expresses her sincere appreciation for the service that Ms. Toll has given to the state as a passionate consumer advocate. Ms. Toll, in her letter of resignation, has expressed her gratitude to the exceptional staff at the Division of Real Estate, representatives of the Attorney General’s office that have provided counseling on legal matters and to industry representatives serving on boards and task forces.” Earlier, Toll’s attorney in the matter, Bill Finger of Evergreen, argued that the attorney general had a conflict of interest in representing Kelley and DORA, as it had represented Toll in numerous matters in the behalf. The attorney generals office removed itself from the matter, and hired a private attorney at $200 per hour instead.

Toll elicited strong opinions

In the wake of Toll’s woes, it was clear that she was a lightning rod for strong opinions. She was often criticized by readers of  InsideRealEstateNews.com and the Denver Post letters as presuming people were guilty and acting as the judge, jury and executioner. Some even called her “Troll” and attacked her as being unfair. Others, however, came to her defense, noting that she had taken more actions against “bad actors” in real estate than any other regulator in Colorado’s history.

Selling home dream for Toll

Toll did not waste any time in hitting the ground in her new profession. She already has created a Web page at Perry & Co. that notes she has testified before Congress on real estate scams; has been named one of the top five most ethical real estate professionals in Colorado; and was a runner-up for the top business person of the year. “Let an expert who knows the ins and outs of the real estate world from all angles buy or sell your home,” according to the site, ErinTollGlover.topseller.net. Glover is her married name. There are no listings yet on her page.

In her own words, this is how Toll described her decision to become a real estate broker, as well as what she considers some of the work she is most proud of since being named the director in the fall of 2006. She does not address the circumstances that led to her being disciplined.

“I have decided to pursue a dream of mine to buy and sell homes for consumers,” Toll wrote in a statement. “I will be affiliated with Perry & Co, a homegrown boutique real estate brokerage that’s been specializing in luxury homes for 40 years. I entered the real estate business when I was only 16 years old. I searched titles for a title insurance company while I was still in high school. Since that time, I stayed involved with real estate while working for the state for over a decade. In 2005, I uncovered a real estate scam involving real estate companies, builders, banks and title insurers. The regulatory action led to more than $45 million in restitution paid back to consumers across the country, and an invitation to testify before the US Congress in 2006.

“‘As the Director of the Division of Real Estate, in 2006 I assisted in drafting and implemented the state’s first laws governing mortgage brokers. In 2009, the Division uncovered significant problems that threatened the conservation easement program designed to protect Colorado’s scenic beauty and wildlife habitat. I testified in support of, and implemented the country’s first conservation easement legislation.

Toll praises staff, state

“I am proud of my many accomplishments while serving the citizens of the state of Colorado. These successes would not have been possible without the hard work of an exceptional and dedicated staff, and Governor appointed commission and board members. In addition, I worked hard to forge strong industry relationships and created several task forces where mortgage lending experts, and education providers assisted the Division in creating appropriate industry standards.

Time to move on

“But is time for me to move on. The last 2 ½ months have given me time to reflect on my ultimate career and family goals. Working for the state does not allow me to achieve goals that are very important to me including being present for my family and protecting consumers from abuse in real estate transactions. I intend to transfer the passion I have for real estate work and consumer advocacy to my new role as an associate broker with Perry & Co. I can be found in the company’s Cherry Creek North office between 3rd and Fillmore

“With this resignation, I want to express my gratitude to the exceptional staff at the Division of Real Estate, the representatives of the Attorney General’s office that have been such good counselors and attorneys for the Division of Real Estate and the industry representatives serving on boards and task forces. It has been my great honor to have served the citizens of the State of Colorado. I have made many dear friends at the Division and in State government. Together, we have had numerous successes implementing legislation that oversees loan originators and conservation easements, as well as real estate brokers and appraisers.

“I will miss the projects, the teamwork and the friendship at the Division and the Department. I wish everyone all the best, as they continue their important consumer protection mission.”

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John Rebchook is traveling this week, but you can leave a message with him at JRCHOOK@gmail.com or 303-945-6865.

Related Posts:

• Waters: Real estate’s new “top cop”
• Waters named director of Real Estate Division
• Rosemary Marshall named to mortgage board
• Erin Toll successor to make about $80,000-$120,000
• Fines soar under Toll

Fines and penalties collected at the real estate division are up 2,470% since Erin Tolll took over in 2006.

The Colorado Division of Real Estate in the first four months of the year collected a record amount of money in fines and penalties.

Through April 29, the divisions collected $303,772.65 in fines and penalties from the industries it regulates, according to information obtained by InsideRealEstateNews.com, through a Colorado Open Records Act request. The division oversees real estate brokers, mortgage brokers, appraisers and conservation easements

Erin Toll, the embattled director of the division, has been on a paid leave since mid-March. She was placed on leave following an investigation of American Home Funding that records show was launched on March 2,the day after Toll had a public dispute with Sen. Ted Harvey, R-Highlands Ranch, an employees of the Greenwood Village-based mortgage company.

Gag order keeps Toll from commenting

Toll is fighting a gag order from her boss, Barbara Kelley, the chief of the Department of Regulatory Agencies from speaking in detail to the media. Her attorney, William Finger of Evergreen, declined to discuss the record amount of fines and penalties collected in 2010. Few observers think that Toll will be returning to her position at the division.

Since being hired as the director in September 2006, Toll prided herself as aggressively weeding out the bad actors in the real estate industry. While welcomed during the heyday of real estate scams and rising foreclosures, some people in real estate believe that she has been unfair to many in a complicated industry, acting as the judge, jury and executioner, and that she was more interested in punishing people than educating them about increasingly complicated industries. In any case, that will change with a new law that will create a board to oversee the discipline of mortgage brokers. Real estate brokers and appraisers already are disciplined by boards.

Fines skyrocketed

One thing that is undisputed is that the amount of money collected in fines and penalties skyrocketed with Toll at the helm.

“I think that (Toll) gets credit for putting the whole thing in place, and launching it and getting it up and running,” said Mike Rosser, a retired mortgage banker who currently serves on the board of a state housing task force. While Rosser said he doesn’t now if Toll will remain in her job, he thinks even if she leaves, the aggressive fine-collecting will continue.

“The system is in place and it will just need to be maintained,” he said. The increased collections, “is probably reflective of what is going on. I wouldn’t read too much into it. It’s what you would expect, so it’s not too surprising. ”

In 2006, the division only collected $11,790 in fines. In other words, in the first four months of his year, the division collected 2,470 percent more than it did in 2006. Mortgage brokers were first required to register with the division and undergo background checks in 2006, and in 2007, they were licensed for the first time. In 2006, was the heyday of subprime and so-called “liar loans,” that at the time were contributing to rising foreclosure rates. Now, most of the foreclosure increases are due to a bad economy, more than bad loan products.

This year’s collections already are 17.9 percent higher than in 2009, and 15.8 percent higher than the previous record of $269,524 collected in 2008. One reason that the division may be collecting more is that it has adopted what is known as the “Expedited Settlement Process,” or ESP, which, allows those fined to agree to pay, without going through other agencies first, such as the attorney general’s office. No one from the DORA returned a call for a comment.

Fines generate revenues, as industry dwindles

Rosser said that in large part, the division requires the collection of fines and penalties to operate, because as people leave the various real estate professions, the division collects less in dues from members.

“I think they are what is called a “self-funded” agency, so I guess at one level they have to collect more in fines, because they do not receive enough from their licensing fees,” Rosser said.

This year, the division has a $5.9 million budget, 3.7 percent higher than the $5.65 million in 2009, and almost 57 percent than the $3.7 million in 2006. So far this year,  the fines and penalties account for about 5.2 percent of the entire budget. In 2006, they accounted for only 0.31 percent of the budget.

Toll is the highest person at the division, earning $9,579 a month, or $114,948 a year. The next highest paid person makes $7,837 monthly, or $94,044.

Year	Fines/Penalties Collected
2006	$11,790
2007	$261,236
2008	$269,524
2009	$257,680
2010 (as of April 29)	$303,773

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-68685.

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Erin Toll claims her constitutional rights have been violated.

Erin Toll today filed a lawsuit in Denver District Court against her boss, Barbara J. Kelley, claiming that her Constitutional rights have been violated. Chris Lines, spokesman for the Department of Regulatory Agencies, which Kelley heads, also was named in the lawsuit.

“Ms. Toll’s rights…have been taken by Defendant Kelley through arbitrary and capricious enactments of restrictions on Ms. Toll without any due process of law,” according to the suit filed by her attorney, Bill Finger. The suit also says that Kelley has refused to meet “face-to-face” to settle the matter. The ban has now exceeded 45 days. “The duration of the ban and taking of Ms. Toll’s constitutional rights are  unnecessary and unwanted and are not momentary based upon emergency or immediate need,” according to the lawsuit.

 On March 16, Kelley placed Toll on involuntary leave with pay, or administrative suspension, as the director of the real estate division. Toll is paid slightly less than $115,000 annually, according to DORA records. When placed on administrative leave, Kelley  also instructed Toll  that she could only make limited comments to the press, and was banned from speaking with employees at the real estate division. Being banned from speaking with fellow employees was a “a total blanket ban on association and speech,” according to the suit. Kelly “threatened Toll with potential discipline,” if she violated the terms, according to the lawsuit.

Barred from speaking to legislators, governor

“Worse yet,” the suit states, on April 20, Kelley banned Toll from speaking at testifying at the state legislature or communicating with Gov. Bill Ritter, according to the suit. The legislature recently passed a bill, waiting Ritter’s signature, which would basically make DORA in charge of the division, instead of it being an autonomous division. The suit also contends that DORA released incomplete information to the press at times. DORA also released to the press an e-mail exchange between her and former division employee Zachary Urban. In the wake of a public dispute with Sen. Ted Harvey, R-Highlands Ranch, Toll wrote Urban that her “ego is a bit bruised” but that it was “nothing a little yoga and responsive action to an attack won’t mend.” The suit says that DORA’s ”purpose of intent of disclosing the Urban e-mail to the public media was to create a negative image of Ms. Toll. The disclosure of the Urban e-mail was done in bad faith given that Ms. Toll was prohibited from commenting on the document.” She said she did not know of it, until the evening before the Denver Post included it in a story. The story ran on the front page of the paper on May 4. Reportedly, the Post plans another large article about Toll this Sunday.

Toll wants to speak to the press

The suit is seeking “injunctive relief” against Kelley, which would enjoin her from enforcing the prohibitions against Toll, including the ban on communicating with employees of DORA and the real estate division; communicating and testifying with legislators or the governor and his office, and ” Ms. Toll from talking to the press or communicating with the press.” She also wants to be able to enter the building occupied by DORA, which includes public and private offices, and even a restaurant.

The building includes the office of attorney regulations, so she cannot enter it to even pay her annual dues as an attorney. It also includes the Civil Rights Division, and she is barred from going to the office “for the filing of a discrimination complaint.” Toll already has filed a whistle-blower complaint with a state office against DORA and Kelley. Her initial request to be re-instated with her full authority has been rejected  by an administrative law judge and by Kelley, decisions she has appealed. She is awaiting a decision on her appeal.

Both a DORA spokeswoman and Toll’s lawyer declines to comment. Earlier, the Colorado Attorney General argued that it was standard practice to bar a person being investigated by a department to speak to the press or fellow employees, while the investigation is ongoing. Toll was placed on leave in the wake of publicly talking about an investigation of American Home Funding and one of its mortgage brokers, Sen. Harvey. DORA later issued a statement saying that Harvey was not being investigated, and had never been the subject of an investigation.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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Erin Toll's power shifting to a board.

Mortgage broker Jim Spray has been waiting about a decade for a state board that would oversee his industry.

Now, it is all but certain he will get his wish this summer.

House Bill -1141, which among other things created the long-awaited board, has been approved by both the House and the Senate. If Gov. Bill Ritter signs it – or at least doesn’t veto it – it is expected to become law in August.

Creating the board has taken on political elements, because it takes away power now held by Erin Toll, the Colorado Division of Real Estate director who is on a paid leave of absence. However, even people on her staff have admitted privately that they have no problems with a board, especially now that some of the worst offenders appear to have been taken out of circulation by aggressively going after bad actors. The new board will treat mortgage brokers similarly to how the division handles disputes with real estate brokers and appraisers. Toll has a gag order from her boss, Barbara Kelley, the head of the Department of Regulatory Agencies, or DORA, which prevents her from publicly speaking on the issue.

Toll supporter also advocates board

“I’m not saying anything disparaging about Ms. Toll; I think she did a fine job,” said Spray, although others in his industry couldn’t disagree with him more, as they think that Toll wielded power with wild abandon, with no regard whether a person was truly innocent or guilty. “But the board model is a good one. I want to get rid of the bad guys – male and female, so as not to be discriminatory - run out of this business. This is an industry that needs policing and I’m glad for the first time iit will have the opportunity to really police itself.”

Indeed, Spray said he has been approached by people about serving on the 5-member board. “Not from the governor’s office itself, but from people who know me,” Spray said. “I’ve gotten a bit of a reputation as a fierce advocate of consumers.”

Terry Jones, chairman of the legislative and regulatory affairs committee for the Colorado Mortgage Lenders Association, also is pleased that a board will be created.

“We think it is both fair and appropriate,” Jones said. “We think the real estate division has done a good job in helping to clean up some of the issues the industry has faced in the past. It was OK for the first few years (after mortgage brokers were first regulated and than required to be licensed) to have the Division of Real Estate in charge. But we would have preferred from the beginning to have a board in place.”

Jones said many of the problems in the past few years revolved around abuses during the subprime mortgage era. “The vast majority of those people are out of business,” Jones said. “A lot of that has happened because of economic forces and really, the whole industry has contracted. I think a lot of the people who have remained in the industry have taken the time to really understand how the business works and are not in it for the quick buck. Today, people are unlikely to take the kind of risks and do the kind of things that had been at the core of a lot of the abuses,” which contributed to skyrocketing foreclosures, he said.

Jones said that his group isn’t taking sides in the chain-of-events that led to Toll being put on leave and her filing a whistle-blower complaint against Kelley and DORA. Creating the board is the right thing to do, regardless of the merits or the lack of merits of the events surrounding Toll and DORA, he said. And he said he does not believe the bill was introduced and passed because of the events surrounding Toll, but rather it moved forwad with little opposition based on its merits.

“The mortgage industry is a complicated one, with many rules and regulations, not only at the state level, but on the federal level,” said Jones, a 40-year veteran of the industry, who is now semi-retired. “It really helps to have the perspectives and knowledge of people who understand the industry, as well as the perspectives of the staff of the division.”

Board brings more perspectives

Peter Lansing, the head of Universal Lending, one of the biggest mortgage banking firms based in Denver and a sponsor of InsideRealEstateNews, said that a board will provide a transparent, open forum where people inside and outside of the industry can contribute their perspectives.

“This will increase the 360-degree view of problems,” Lansing said. “Whether it is the director of the real estate division or a board, the goal is the same – making sure that mortgage lenders treat consumers properly.” The transparency of a board, however, can be a “double-edge sword,” he said, as some people appearing in front of the board, may wish that they could explain things behind closed doors, rather than be scrutinized publicly.

Type 1, Type 2  becomes an issue

In another twist, which probably would not have been much of an issue except for the circumstances surrounding Toll, who had a public dispute with mortgage broker Sen. Ted Harvey, R-Highlands Ranch, the day before Toll officially launched an investigation into American Home Funding, the company that employs Harvey, is that HB-1141 makes the real estate division what is called a “Type 2 transfer” agency that puts it more under the control of DORA. The Division of Real Estate,currently is a Type 1 agency, which is considered more autonomous than a Type 2. The new board, however, is a Type 1 transfer. Some observers worry that when the real estate division becomes a Type 2 agency, its power could be influenced by whoever is governor, as the governor appoints the director of DORA.

However this concept did not arise in the wake of  Toll being disciplined, which has been seen by some observers as stripping her powers because of the ensuing controversey. A 2007 Sunset Review of the Division recommended that it be changed in a Type 2 agency, even though it had been transferred under DORA’s umbrella as a Type 1 transfer in 1968. “In all likelihood (that was) a technical oversight that should be corrected,” according to the 2007 report.

Most Type 1 board and commissions are part of Type 2 agencies, the report notes. In a nutshell, if both the board and the division are type 1, it can be difficult to determine where the buck stops.

“Having a Type 1 agency supporting a Type 1 board or commission can be problematic in terms of clear roles and responsibilities and clean lines of accountability,” according to the state report. “For example, if the Commission is a Type 1 entity and the Division, too, is a Type 1 entity, problems can arise when the Commission sets a policy course that conflicts with the ideals of the staff of the Division.”

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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Erin Toll is a subject of a Denver Post editorial.

The Denver Post today has an editorial on Erin Toll. The editorial under the headline, Toll: Dedicated servant or overzealous administrator? re-caps what has transpired in the Toll case since she was placed on paid, administrative leave in March. The editorial argues that “public is owed a fuller accounting of Toll’s actions in order to understand whether she was an “out-of-control administrator, or victimized for being an ambitious public servant with a strong reform agenda.” If you initially missed the editorial, click on the highlighted link above.

For a related story, please visit Did Toll-Harvey dispute spark investigation?

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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